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Dieter Rencken's article on F1 team finances


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#1 midgrid

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Posted 26 August 2013 - 13:27

I haven't seen this posted elsewhere, so apologies if this is old information, but Autosport published an interesting article by Dieter Rencken in its current issue which includes estimates of the income and expenditure of every team for the current or recent seasons.  The data he presents is as follows:

 

Red Bull Racing

Budget: £235.5m (estimated from overall RBR/RBT budget)

Income: £240m (of which £110m comes from Red Bull, £60m from other sponsors, and £70m from FOM earnings)

Profit: £4.5m net

 

Scuderia Ferrari

Budget: £250m (including engines)

Income: £260m (of which £160m comes from sponsors including FIAT, £20m from customers, and £80m from FOM earnings)

Profit: £10m net (group) 2012

 

McLaren Racing

Budget: £160m

Income: £180m (of which £120m comes from sponsors, and £60m from FOM earnings)

Profit: £20m 2011

 

Lotus

Budget: £130m

Income: £120m (of which £30m comes from Genii, £45m from other sponsors, and £45m from FOM earnings)

Profit: £-10m

 

Mercedes Grand Prix

Budget: £160m (including engines)

Income: £150m (of which £50m comes from Daimler, £60m from other sponsors, and £40m from FOM earnings)

Profit: £-10m 2011

 

Sauber

Budget: £90m

Income: £75m (of which £40m comes from sponsors, and £35m from FOM earnings)

Profit: £-15m

 

Force India

Budget: £100m

Income: £75m (of which £30m comes from group companies {Mallya and Sahara}, £10m from other sponsors, and £35m from FOM earnings)

Profit: £-25m

 

Williams

Budget: £90m (purified, excluding Hybrid Power)

Income: £90m (of which £30m comes from PDVSA, £28m from other sponsors, and £32m from FOM earnings)

Profit: Even

 

Scuderia Toro Rosso

Budget: £70m

Income: £70m (of which £32m comes from Red Bull, £8m from other sources, and £30m from FOM earnings)

Profit: Even

 

Caterham

Budget: £65m

Income: £65m (of which £26m comes from group companies {Fernandes}, £9m from other sponsors, and £30m from FOM earnings)

Profit: Even

 

Marussia

Budget: £51m

Income: £51m (of which £30m comes from Marussia, £15m from other sponsors, and £6m from FOM earnings)

Profit: Even

 

 

* All FOM earnings figures are from 2012 regardless of final profit year.


Edited by midgrid, 26 August 2013 - 13:30.


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#2 stillOrange

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Posted 26 August 2013 - 13:47

I'm surprised with the budget difference between RBR, Ferrrari vs Mercedes.

Just didn't expect it to be so big. They haven't done bad considering this.



#3 Grundle

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Posted 29 August 2013 - 10:29

Would have to say Ferrari have underperformed relative to budget, although Massa is a major factor.
McLarens simulation technology is their trump card, but can't make up for budget.
Mercedes receive half the FOM money of Ferrari and only 5M more than Sauber.
Poor Marussia only get 6M FOM money. Bernie really hates these backmarkers.

#4 ensign14

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Posted 29 August 2013 - 10:57

You can see why certain teams oppose budget caps, can't you?  Even by spending over 50% more Ferrari can't dominate Mercedes.  If they were on an even keel it would be bitchslap time.



#5 ch103

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Posted 29 August 2013 - 11:21

Excellent post!  Would it be an ok measure for efficiency to divide the 2012 budget by 2012 WCC points?  

 

Then we would have a  points/£ figure to compare each team with.  

 

I would do it myself but I am in the office and do not want to be caught doing non work activitives.. (such as posting on a racing BB :cool: )



#6 oetzi

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Posted 29 August 2013 - 11:28

If he's going to include engine income for Ferrari but not for Mercedes then I'm inclined to view these numbers as, at best, woefully inaccurate.



#7 Frank Grimes

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Posted 29 August 2013 - 11:34

Christ those are razor thin margins. I know its apples and oranges (comparing F1 to anything in the real world) but my company goes into red alert if our contribution margin dips below 32%. 



#8 ElJefe

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Posted 29 August 2013 - 11:41

I can recall that during the early 2000s (with tobacco sponsorship still allowed and car manufacturers still omnipresent) that Ferrari and McLaren had budgets close to 400-450 million dollars, not adjusted for inflation. If we do adjust for inflation to get a representative result, we find that 450 million dollars back then amounts to more than 600 (!) million dollars today. To put this into perspective, that is more than twice the Ferrari budget of today.



#9 Slackbladder

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Posted 29 August 2013 - 11:45

Christ those are razor thin margins. I know its apples and oranges (comparing F1 to anything in the real world) but my company goes into red alert if our contribution margin dips below 32%. 

 

Not to mention those teams are effectively financed by parent companies (ie Red Bull/Fiat/Merc) etc..so the concept of 'breaking even' really isn't true.



#10 Wingcommander

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Posted 29 August 2013 - 12:14

Basically McLaren, Ferrari(?), Williams and Sauber (look how that has turned out) are operating as sustainable racing teams. The rest are just marketing excercises or in trouble.



#11 Buttoneer

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Posted 29 August 2013 - 13:14

Excellent post!  Would it be an ok measure for efficiency to divide the 2012 budget by 2012 WCC points?  

 

Then we would have a  points/£ figure to compare each team with.  

 

I would do it myself but I am in the office and do not want to be caught doing non work activitives.. (such as posting on a racing BB :cool: )

No idea how this is going to format but here goes, ordered by most efficient first ...

 

edit; deleted the garbled crap so now manually...

 

McLaren 0.42 £m/point

Lotus 0.43

RB 0.51

SF 0.63

Sauber 0.71

FI 0.92

AMG 1.13

WGPE 1.18

STR 2.69



#12 Wingcommander

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Posted 29 August 2013 - 13:47

Poor Marussia only get 6M FOM money. Bernie really hates these backmarkers.

 

And now they get nothing. The gap to Caterham & co will be even bigger, unless they get the 10th place this year (and if that makes Bernie to offer them a concorde to sign).



#13 lustigson

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Posted 29 August 2013 - 14:54

Would have to say Ferrari have underperformed relative to budget, although Massa is a major factor.

 

Not if you take into account that said budget includes engines.

 

If he's going to include engine income for Ferrari but not for Mercedes then I'm inclined to view these numbers as, at best, woefully inaccurate.

 

Good point.



#14 Felix

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Posted 29 August 2013 - 15:09

Not if you take into account that said budget includes engines.

 

 

Good point.

 

The individual team profiles explain that Ferrari is a single reporting entity, while Mercedes is two separate companies, the team and High Performance Engines. The point is made that when added together Mercedes has the largest overall budget and headcounts. 


Edited by Felix, 29 August 2013 - 15:10.


#15 oetzi

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Posted 29 August 2013 - 15:13

I had a feeling there was something a little awry in there somewhere. Just the two drivers and 27 team principals will take up a fair chunk of Merc's theoretical £150m budget.

 

Did he provide the figures for HPE? Seem to remember a figure of about £17.5m for Merc engines for a season. Must be over £90m net out for the biggest overall budget, so maybe £130m on costs with about £35m revenue from the two customer teams at a guess?

 

If building engines costs ~£90m, maybe it's not so surprising how completely blown away everyone has been by Red Bull, as that would provide them with a budget gap for staff and car of ~£70m to Ferrari, McLaren and Mercedes, who would all be on ~£160m.

 

That is, of course, assuming these figures are accurate.


Edited by oetzi, 29 August 2013 - 16:03.


#16 PokePoke

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Posted 29 August 2013 - 15:39

Well, Marussia or Caterham have larger budgets than factory teams in MGP ~40mln$ , WEC ~40mln$(Audi, Toyota) and their are the smallest, poorest teams in F1. It just shows huge gap between F1 and other motorsport series. Even HRC from MGP (giant in motocykle racing) looks like dwarf compare to F1.


Edited by PokePoke, 29 August 2013 - 15:43.


#17 GT Racing Online Magazine

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Posted 29 August 2013 - 16:01

Doesn't Mercedes get income for their customer engines or is that the transfer from Daimler? Also these strike me as really rough estimates some bordering on outright guessing - interesting none the less.


Edited by GT Racing Online Magazine, 29 August 2013 - 16:02.


#18 oetzi

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Posted 29 August 2013 - 16:10

That's the trick and the problem, isn't it? So long as it's an interesting subject and nobody who knows the truth will contradict you, you can pretty much say what you like. It makes for a good story...


Edited by oetzi, 29 August 2013 - 16:10.


#19 Nustang70

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Posted 29 August 2013 - 22:24

Well, given how well teams like Force India or Toro Rosso can do with significantly lower budgets than the frontrunners (qualifying 1 or 1.5 seconds off pole), it seems to me a lot of the financial woes of many of the teams could be solved without substantively impacting the show by imposing a £ 100 million budget cap.  

 

If these numbers are accurate, and each team spent the same proportional amount to the leaders with a £ 100 million budget cap in place, this is what each team would be spending:

 

Red Bull £94.2

Ferrari £100

Mclaren £64

Lotus £52

Mercedes £64

Sauber £36

Force India £40

Williams £36

Toro Rosso £28

Caterham £26

Marussia £20.4

 

Obviously it isn't nearly as simplistic as this, but I think you get the idea.  Looks like most teams can scrape together at least £60 million, which ought to keep them reasonably competitive within the confines of the budget cap.   


Edited by Nustang70, 29 August 2013 - 22:50.


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#20 kimifan88

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Posted 30 August 2013 - 01:56

Theres something which has been bugging me about these figures. Could be because I havent thought about it hard enough but something seems wrong. Or at least theres something I dont get. Lotus is an easy one to explain what Im on about. The numbers show that it has 120m coming in and it spent 130m which means that it lost 10m. What I cant understand is what it used to cover the loss. The loss must be 'real' money (compared to a paper loss) because it comes from the team spending more than it had coming in. If 'real' money was lost then it must have come from somewhere. The loss cant have been covered by the owners because thats Genii and the amount it gave the team is shown in its income. So where did it come from? Have I missed something? I just dont 'get' it.

#21 Kalmake

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Posted 30 August 2013 - 04:10

OP is a bit unclear, since it says "expenditure", but then lists "budget" which is just a plan.

 

It's not unusual to spend more than you make for a time. It just can't go on forever. They just made a loss that year. Maybe they had some extra to pay it off. Maybe they had to take a loan.



#22 lustigson

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Posted 30 August 2013 - 07:39

Well, given how well teams like Force India or Toro Rosso can do with significantly lower budgets than the frontrunners (qualifying 1 or 1.5 seconds off pole), it seems to me a lot of the financial woes of many of the teams could be solved without substantively impacting the show by imposing a £ 100 million budget cap.  

 

If these numbers are accurate, and each team spent the same proportional amount to the leaders with a £ 100 million budget cap in place, this is what each team would be spending:

 

Red Bull £94.2

Ferrari £100

Mclaren £64

Lotus £52

Mercedes £64

Sauber £36

Force India £40

Williams £36

Toro Rosso £28

Caterham £26

Marussia £20.4

 

Obviously it isn't nearly as simplistic as this, but I think you get the idea.  Looks like most teams can scrape together at least £60 million, which ought to keep them reasonably competitive within the confines of the budget cap.   

 

Hence the top teams' unwillingness to go with any form of a budget cap, since it takes away one of their main advantages. If Force India can qualify 1.5 seconds behind the leaders on roughly 30% of Red Bull's budget, who knows what they might accomplish when the top teams cannot spend as much as they have.



#23 Slackbladder

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Posted 30 August 2013 - 15:00

OP is a bit unclear, since it says "expenditure", but then lists "budget" which is just a plan.

 

It's not unusual to spend more than you make for a time. It just can't go on forever. They just made a loss that year. Maybe they had some extra to pay it off. Maybe they had to take a loan.

 

Business don't go bust because they make losses, they ultimately go bust because they run out of money, and can't pay people.



#24 kimifan88

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Posted 31 August 2013 - 02:00

@kalmake
Thats just it-Ive thought about those kind of things. Theres a wonderful website called duedil.com and you can buy financial statements there for just £0.80. The latest ones for Lotus show that in 2012 it had third party (meaning not Genii) loans of £39.7 million which is way more than the £10 million it is said that it lost. The loss can not have been covered by cash either because it only had £1.7 million of that. So it looks like a mystery or an error/misunderstanding.

#25 ch103

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Posted 31 August 2013 - 09:57

No idea how this is going to format but here goes, ordered by most efficient first ...

 

edit; deleted the garbled crap so now manually...

 

McLaren 0.42 £m/point

Lotus 0.43

RB 0.51

SF 0.63

Sauber 0.71

FI 0.92

AMG 1.13

WGPE 1.18

STR 2.69

 

Buttoneer - thanks man!!!

 

So McLaren and Lotus come out on top... interesting.  



#26 Anderis

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Posted 31 August 2013 - 10:10

And Williams near bottom despite having one of their best seasons in years.



#27 Deerfield

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Posted 31 August 2013 - 12:08

very interesting info and consistent with other sources. It's evident RBR it's overachieving, or SF underacheving



#28 sopa

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Posted 31 August 2013 - 15:03

very interesting info and consistent with other sources. It's evident RBR it's overachieving, or SF underacheving

 

Compared to others (Mercedes, McLaren, Lotus) RBR is not overachieving, they are doing what they are supposed to do. But Ferrari is underachieving indeed.

 

Pity about Marussia. They get £45M from sponsors, which is more than Sauber, Force India or STR get from sponsors. But just because of the allocation of FOM money they get much less, have a small budget and consequently struggle to develop themselves into a competitive outfit.